HARRISBURG, Pa. - Rite Aid Corp. reported today that its third-quarter loss widened sharply and lowered its 2008 profit outlook for the second time this year, as leery consumers held their pocketbooks closer.
Shares tumbled nearly 30 percent, and were down $1.18 or 28.8 percent, to $2.92 in late morning trading on the New York Stock Exchange.
Rite Aid's chairman, president and chief executive, Mary Sammons, said she is disappointed with the results, but that she remains pleased with progress toward integrating of more than 1,850 Brooks and Eckerd stores acquired in June.
Rite Aid said its loss attributable to common shareholders was $93 million, or a 12 cents per share for the three months ending Dec. 1. Analysts surveyed by Thomson Financial expected a loss of 7 cents.
In the same period a year ago, the company reported a loss of $6.82 million, or a penny per share.
Sammons touted improvements in pharmacy sales, gross margin rate and customer satisfaction surveys, and urged investors to focus on the company's long-term strategy, instead of quarter-by-quarter results.
"When we are through, we expect Rite Aid will be a formidable company," Sammons said during a conference call with analysts.
Sammons said sales were hurt by a sluggish start to the cough, cold and flu season and slower customer holiday shopping that she said is affecting the wider industry.
Sales in stores open at least a year increased 0.7 percent - lagging well behind larger competitors CVS/Caremark Corp. and Walgreen Co., as Rite Aid has for years.
The Camp Hill-based company said its increased cash flow and income tax benefit from the acquisition were exceeded by the increase in expenses from the expansion and integration.
Revenues for the quarter were $6.52 billion, short of analyst predictions of $6.6 billion. The company said it took in $4.32 billion a year ago, which was before the acquisition.
In the quarter, the company opened 12 new stores, relocated 21 and closed or sold 64. Stores in operation at the end of the quarter totaled 5,089 in 31 states and Washington, D.C.
Rite Aid said it now expects fiscal 2008 sales to be between $24.3 billion and $24.6 billion, down from its September forecast of $24.5 billion to $25.1 billion. It also said it expects to lose between $161 million and $192 million in fiscal 2008, compared with its earlier prediction of $78 million to $161 million.